The Insider

Throwback Thursday -- Sequester
By Marjorie Censer
July 30, 2015 at 11:19 AM

Welcome to Throwback Thursday, InsideDefense.com's weekly look back at what was happening on this day in years past.

On July 30, 2013, then-Defense Secretary Chuck Hagel detailed the findings of the Strategic Choices and Management Review, the U.S. military's first reckoning for how it would absorb sequestration.

He warned that the review found the worst-case scenario would "break" some parts of the current defense strategy and could trigger a 10-year weapons procurement holiday.

Today, the Pentagon and Congress are bracing for the potential return of sequestration in fiscal year 2016.

Story Link: /node/75676

Dunford Confirmed
By Tony Bertuca
July 30, 2015 at 10:46 AM

Senate late yesterday confirmed Marine Corps Gen. Joseph Dunford to become the next chairman of the Joint Chiefs of Staff, succeeding Army Gen. Martin Dempsey.

Confirmed by a voice vote, Dunford will become only the second Marine to lead the Joint Staff, the first being retired Gen. Peter Pace, who won the job in 2005.

Dunford has previously served as commandant of the Marine Corps.

Earlier this week, Air Force Gen. Paul Selva was confirmed as the next vice chairman of the Joint Chiefs, and Air Force Gen. Darren McDew was confirmed to succeed him as the new head of U.S. Transportation Command.

Protest Spotlight
By Marjorie Censer
July 30, 2015 at 10:42 AM

(This regular feature highlights protests decided by the Government Accountability Office.)

Agency: Defense Logistics Agency-Energy

Protester: Onésimus Defense

What GAO found: Onésimus Defense protested corrective action taken by DLA in connection with a solicitation for confined space training, arguing DLA's amendments to the RFP's pricing provisions for travel costs were improper and inconsistent with regulations.

The protest is the contractor's third related to this procurement, GAO notes. The agency partly denied and partly dismissed the protest.

"In sum, we find that Onésimus’s protest of DLA’s corrective action reflects little more than Onésimus’s preference for the original RFP pricing provisions, and its attempt to relitigate its initial protest and exclude other offerors from the competition," GAO writes.

The decision: http://www.gao.gov/assets/680/671741.pdf

Oshkosh Defense Sales Fall
By Marjorie Censer
July 30, 2015 at 10:11 AM

Oshkosh said today sales in its defense segment fell nearly 59 percent in the third quarter to hit $194.2 million.

The decrease, the company said, was a result of lower DOD sales "stemming from the break in production under the [Family of Heavy Tactical Vehicles] program and lower [Family of Medium Tactical Vehicles] requirements, as well as the absence of international sales of [Mine-Resistant, Ambush Protected All-Terrain Vehicles]."

The unit reported a loss of $7.1 million for the quarter, compared to profit of $19.1 million in the same period the prior year.

NCI Boosts Sales, Profit
By Marjorie Censer
July 29, 2015 at 5:08 PM

NCI said today that sales in its most recent quarter hit $85.8 million, up about 10 percent from the same period the prior year.

The contractor also posted profit of $3.1 million, up from $2.4 million during the same three-month period a year ago.

NCI attributed the boost in sales to its acquisition of Computech as well as some new awards. However, NCI noted that it saw reductions in staffing and in scope on other contracts.

ManTech Sales Down, Profit Up
By Marjorie Censer
July 29, 2015 at 5:06 PM

ManTech International reported Wednesday that sales in its most recent quarter declined 17 percent to hit $384 million.

However, the company boosted its quarterly profit by nearly 62 percent to reach $12.5 million.

NCI Names Clark CEO
By Marjorie Censer
July 29, 2015 at 4:13 PM

NCI said Wednesday that Brian Clark, who has been president since early 2012, will also become the contractor's chairman and chief executive officer later this year.

Charles Narang, NCI's current chairman and CEO, will step down as CEO as of Oct. 1 and become non-executive chairman. Narang founded the company in 1989.

Clark joined NCI in 2011 as chief financial officer, after previously serving as CFO of Stanley, which was acquired by CGI in 2010. Clark has also served as an executive at Titan.

Unclassified Networks Down
By Scott Maucione
July 29, 2015 at 3:23 PM

The Joint Staff's unclassified networks are currently down for all users and the Defense Department is working to restore service as fast as possible, according to Pentagon spokeswoman Valerie Henderson.

The network, which includes email for some DOD personnel and Joint Staff, was shut down this past weekend after a threat was detected, according to CNN.

"We have taken the Joint Staff network down and continue to investigate," Henderson wrote in a July 29 email. "We continue to identify and mitigate cybersecurity risks across our networks."

Recently DOD has been amping up the priority of cybersecurity as threats from crime groups and foreign nations continue to increase.

Last month, a hack of the Office of Personnel Management compromised more than 21 million federal employees' information, including social security numbers and security clearance status.

Carter On Iran
By Tony Bertuca
July 29, 2015 at 2:57 PM

Defense Secretary Ash Carter told the Senate Armed Services Committee on July 29 that the Pentagon can strike Iran anywhere and at any time if the Iranians welch on an agreement to halt development of a nuclear weapon.

"If Iran were to commit aggression, our robust force posture ensures we can rapidly surge an overwhelming array of forces into the region, leveraging our most advanced capabilities, married with sophisticated munitions that put no target out of reach," he said.

Protest Spotlight
By Marjorie Censer
July 29, 2015 at 8:00 AM

(This regular feature highlights protests decided by the Government Accountability Office.)

Agency: Army

Protester: Strategic Resources Inc.

What GAO found: SRI protested the exclusion of its proposal from the competitive range in a bid to provide the Army logistics support services for the Army Prepositioned Stocks-3 Charleston Afloat program.

The Army evaluated SRI's proposal as noncompliant because its total estimated dollar value on one attachment did not match its total proposed price on another -- a solicitation requirement. SRI argued its price was consistent, but GAO denied the protest.

The decision: http://www.gao.gov/assets/680/671694.pdf

Kendall Reviewing Sikorsky Buy
By Marjorie Censer
July 28, 2015 at 4:05 PM

Frank Kendall, the Pentagon's top acquisition official, said today the Defense Department will review Lockheed Martin's planned $9 billion purchase of Sikorsky.

Lockheed announced last week it plans to acquire the helicopter maker. The deal is expected to close around the end of the year.

"We're going to go through the normal review process we would with any merger," Kendall said at a directed-energy event in Tysons Corner, VA, hosted by the Center for Strategic and Budgetary Assessments.

"This is a large one with consequences for the industrial base, so we're going to take a careful look at it,” he said.

Marillyn Hewson, Lockheed's chief executive, said last week that she has discussed the deal with Pentagon officials and doesn't anticipate problems.

“We are not reducing the number of competitors at all . . . in the helicopter segment, so in that sense there shouldn't be a concern,” she said. “There's very little overlap between our two portfolios.”

Textron Sales Down
By Marjorie Censer
July 28, 2015 at 9:54 AM

Textron said today that sales in its most recent quarter hit $3.2 billion, down about 7 percent from the same period a year earlier.

The company's quarterly profit hit $167 million, up from $144 million in the same three-month period the prior year.

Textron said quarterly sales were down at Bell, partly because of reduced delivery of V-22s, H-1s and commercial helicopters. But sales were up at Textron Systems, which the company attributed to improved sales of unmanned systems and marine and land systems.

However, the Textron Systems unit saw lower weapons and sensors sales and its profit was down for the quarter.

Scott Donnelly, Textron's chief executive, also said he doesn't expect Lockheed Martin's planned acquisition of Sikorsky to significantly alter the market.

"The dynamics, in terms of competition in the marketplace for us, are largely unchanged," he told analysts during a call this morning.

This Week's Inside the Army
By Sebastian Sprenger
July 27, 2015 at 2:06 PM

From this week's Inside the Army:

1. Now that the Army's race to build a cadre of cyber-savvy soldiers is well underway, next up is the question of what equipment to buy for them.

Full story: http://ow.ly/Q8Sp3

2. The interplay between robots and human soldiers will be on display at the upcoming Network Integration Evaluation in September and October. Insights from the drill will help the Army determine exactly how to put the fast-moving discipline of machine autonomy to use on the battlefield.

Full story: http://ow.ly/Q8Svr

3. The commander of a U.S. unit requesting more powerful weapons for Stryker vehicles stationed in Europe spoke to reporters last week, providing important context for what has grown into a $400 million budget proposal.

Full story: http://ow.ly/Q8SAm

This Week's Inside the Navy
By Lee Hudson
July 27, 2015 at 11:05 AM

From this week's edition of Inside the Navy:

1. The Joint Strike Fighter sustainment office's top concern is identifying issues on all three F-35 variants so that retrofit modifications can be performed.

Full story: http://bit.ly/1GUxG3E

2. Military Sealift Command is preparing to modify two T-AKE dry-cargo ships so they can house the MV-22 Osprey helicopter in their hangars.

Full story: http://bit.ly/1JpJKQG

3. The Navy has awarded Airtec Inc. a contract extension lasting three years and worth upwards of $80.7 million to conduct intelligence, surveillance and reconnaissance in support of U.S. Southern Command's efforts to target organized crime.

Full story: http://bit.ly/1LNXiYh

Week Ahead
By Tony Bertuca
July 24, 2015 at 5:31 PM

The week ahead is dominated by defense contractors' earnings calls, a Senate Armed Services Committee nomination hearing for the next chief of naval operations and a (scheduled) senior leadership conference at the Pentagon.

Monday

Chairman of the Joint Chiefs of Staff Gen. Martin Dempsey is scheduled to speak at the United Nations in New York.

Tuesday

Textron is scheduled to report its second quarter earnings.

The Defense Department's chief information officer is scheduled to host a roundtable with reporters to discuss a range of issues relating to information technology.

The Center for Strategic and Budgetary Assessments will host a directed energy summit featuring Frank Kendall, the Pentagon's acquisition chief.

Wednesday

General Dynamics, Northrop Grummann, Booz Allen Hamiliton, NCI and ManTech International all plan to announce their second quarter earnings.

Thursday

The Senate Armed Services Committee is scheduled to consider the nomination of Adm. John Richardson to become the next chief of naval operations.

As previously reported by InsideDefense.com, top Pentagon officials are scheduled to participate in a senior leadership conference to discuss a potential budgetary strategy for fiscal year 2017, specifically moves to redirect funding to space, cyber and nuclear priorities.

Friday

Friday marks the beginning of congressional recess. At present, it is expected that the House and Senate negotiators will not complete a final version of the FY-16 defense authorization bill until September.